Your investment options
Members of this pension plan can invest their pension savings in either:
1. An investment fund
A fund can invest in different things such as property, company shares, bonds and cash. It is run by a fund manager who makes sure the fund(s) is/are being run in the right way on behalf of the investors.
If you select one of our Target Date Funds, you will also be choosing a fund that adjusts the way your savings are invested as you get closer to your target retirement date and beyond. For more information see our Guide to Target Date Funds.
If you invest in a lifestyle profile, the charges you’ll pay will be calculated on the amount of your pension savings invested in each fund(s).
2. A lifestyle profile
This is an investment strategy that automatically adjusts where your pension pot is invested as you approach your selected retirement age. A typical lifestyle profile is designed to automatically move your money into funds that reflect the way you want to take your money when you get to your selected retirement date, such as taking regular income or cash lump sums.
To find out more about funds including our Target Date Funds, and lifestyle profiles and how they work please see Your Investment Guide.
3. Target Date Funds vs lifestyle profiles
Target Date Funds
The Target Date Funds are designed for members who want to keep their savings invested beyond their selected retirement date and take income from them.
This means that when you reach your selected retirement date most of your savings will be invested in corporate and government bonds, as well as a smaller amount of company shares. The percentage of company shares will reduce over time.
- A Target Date Fund will invest in different assets, which are types of investments such as bonds or shares. These will change over time, as you approach, and go beyond, your selected retirement date.
- The fund manager can make changes if they think it will deliver a better outcome for members.
- Unlike a lifestyle profile, the fund manager will continue to change the assets held by the fund beyond the fund’s target date.
Lifestyle profiles
- A lifestyle profile gradually moves your savings into other funds that prepare you for retirement as you approach your selected retirement date.
- These changes will happen automatically and will stop when you reach your selected retirement date.
This plan offers six lifestyle profiles, which are each designed for a different outcome when you retire. The way your savings are invested as you approach your selected retirement date will change depending on whether you want to:
- take all your pension pot as cash
- use your pension pot to buy a guaranteed income (an annuity)
- leave your pension pot invested.
The table below shows some important differences between Target Date Funds and lifestyle profiles.
Investing in a Target Date Fund
Investing in a lifestyle profile
Members are invested in one fund for their whole retirement journey.
Members will be invested in more than one fund as they approach retirement.
Bonds are a type of asset that can form part of a fund. The fund invests in a larger amount of bonds as members approach their selected retirement date.
At a certain point before a member’s selected retirement date, their savings will be moved into different fund(s). Further information can be found in the specific lifestyle factsheet
Members are likely to leave their savings invested and drawdown income.
Members can choose different lifestyles, which are designed for those who would like to choose either drawdown, an annuity or cash at retirement.
The fund manager can change how the fund is invested if they think it could deliver a better outcome for members.
The switching of money into other funds happens automatically and cannot be changed to reflect market conditions.
The fund manager can make changes to the way the fund is invested beyond the ‘target date’.
Automatic switching stops when members reach their selected retirement date. Members' savings will stay invested in this way from that point.
Members can invest in other funds, including other Target Date Funds, at the same time.
Members invested in a lifestyle profile cannot invest in any other funds or lifestyle profiles at the same time.
Responsible investing
As well as caring about your financial future we believe that we have a responsibility to consider the impact that the companies that we invest in have on the world around us. The money we manage for you and for millions of other savers means that we can influence some of the world’s largest companies. If a company isn’t changing the way they work, we’ll work with them to help them make change.
You can find out more about how the money from your pension is invested to make a difference on our Environment, Social and Governance Hub.
If you want to make sure that you are making responsible investment choices, our fund guide will help you understand your options.
Balancing risk and reward
All investment involves a degree of risk. It’s important that you understand, and are comfortable with, the risks you're taking before making any investment choices.
Your Investment Guide includes a step-by-step guide to help you understand all the things you should consider before making any investment decisions.
Want more detailed information about your funds?
For more information on your investments, see the Your Investment Guide. For specific details about your funds such as their up-to-date performance and unit prices, visit our Manage Your Account.
If you think you want to make your own investment decisions, visit Investment guide - pension pot for the things you need to consider.
